A critical behavioural economics and behavioural science reading list

This reading list is a balance to the one-dimensional view in many popular books, TED talks, or conferences. For those who feel they have a good understanding of the literature after reading Thinking Fast and Slow, Predictably Irrational and Nudge, this is for you. [In the time since I first wrote this, it’s fair to say that the balance has swung on Twitter.]

The purpose of this reading list is not to argue that all behavioural economics or behavioural science is bunk (it’s not). It is also not designed to be balanced – you can combine this list with plenty of good reading lists from elsewhere for that (for example).

Please let me know if there are any other books or articles I should add, or if there are any particularly good replies to what I have listed. I am sure I have missed some good ones. I have set a mild quality bar on what I have included – I don’t agree with all the arguments, but everything on the list has at least one interesting idea.

Books

Gerd Gigerenzer, Peter Todd and the ABC Research Group’s Simple Heuristics That Make Us Smart: Simple heuristics can be both fast and accurate, particularly when we assess real-life performance rather than conformity with the principles of rationality.

Doug Kenrick and Vlad Griskevicius’s The Rational Animal: How Evolution Made Us Smarter Than We Think: A good introduction to the idea that evolutionary psychology could add a lot of value to behavioural economics, but has the occasional straw man discussion of economics and a heavy reliance on priming research (and you will see below how that is panning out).

David Levine’s Is Behavioural Economics Doomed?: A good but slightly frustrating read. I agree with Levine’s central argument that rationality is underweighted, but the book is littered with straw man arguments.

General and methodological critiques

Nathan Berg and Gerd Gigerenzer’s As-if Behavioral Economics: Neoclassical economics in disguise: “As-if’ arguments are frequently put forward in behavioral economics to justify ‘psychological’ models that add new parameters to fit decision outcome data rather than specifying more realistic or empirically supported psychological processes that genuinely explain these data.” Includes a critique of prospect theory’s lack of realism as a decision-making process (pdf of working paper)

Ken Binmore’s Economic Man – or Straw Man?(pdf): The claim “economic man” is a failure can be both attacking a position not held by economics and ignoring the experimental evidence of people behaving like “economic man”.

Ken Binmore and Avner Shaked’s Experimental economics: Where next? (pdf): “[W]e urge experimentalists to … join the rest of the scientific community in adopting a more skeptical attitude when far-reaching claims about human behavior are extrapolated from very slender data”. See Avner Shaked’s webpage documenting the subsequent debate.

Joseph Henrich, Steven Heine and Ara Norenzayan’s The weirdest people in the world?: “[W]e need to be less cavalier in addressing questions of human nature on the basis of data drawn from this particularly thin, and rather unusual, slice of humanity.”

David Levine and Jie Zheng’s The Relationship Between Economic Theory and Experiments (pdf): “[T]he impression that economic theory has little or no significance for explaining experimental results is misleading. Economic theory makes strong predictions about many situations and is generally quite accurate in predicting behavior in the laboratory. In situations where the theory is thought to fail, the failure is in the application of theory rather than the theory failing to explain the evidence.”

Steven Levitt and John List’s Homo economicus Evolves (pdf): “Economic models can benefit from incorporating insights from psychology, but behavior in the lab might be a poor guide to real-world behavior.”

The Open Science Collaboration’s Estimating the reproducibility of psychological science (pdf): “Thirty-six percent of replications had significant results; 47% of original effect sizes were in the 95% confidence interval of the replication effect size; 39% of effects were subjectively rated to have replicated the original result.” Social psychology fares particularly poorly.

A note by Ariel Rubinstein on a couple of behavioural economics papers by Colin Camerer and Matthew Rabin: ” For Behavioral Economics to be a revolutionary program of research rather than a passing episode, it must become more open-minded and much more critical of itself.”

Counterpoints to famous biases, effects and stories

Choice overload: Mark Lepper and Sheena Iyengar’s famous jam study (pdf). A meta-analysis by Benjamin Scheibehenne and friends (pdf) – the mean effect size of changing the number of choices across the studies was virtually zero.

Applications of behavioural economics (and nudging)

Philip Booth’s Behavioural economics – a critique of its policy conclusions: “We seem to have gone … to a situation where we have regulators who use economics 101 supplemented with behavioural economics to try to bring perfection to markets that simply cannot be perfected and perhaps cannot be improved.”

John Cochrane’s Homo economicus or homo paleas?: “The case for the free market is not that each individual’s choices are perfect. The case for the free market is long and sorry experience that government bureaucracies are pretty awful at making choices for people.” Noah Smith responds.

Reuben Finighan’s Beyond Nudge: The Potential of Behavioural Policy (pdf): “Policymakers often mistakenly see behavioural policy as synonymous with “nudging”. Yet nudges are only one part of the value of the behavioural revolution—and not even the lion’s share”

Tim Harford on Behavioural Economics and Public Policy: “The appeal of a behavioural approach is not that it is more effective but that it is less unpopular.” (Google the article and go through that link if you hit the paywall.)

George Loewenstein and Nick Chater’s Putting nudges in perspective: “This paper aims to remind policy-makers that behavioural economics can influence policy in a variety of ways, of which nudges are the most prominent but not necessarily the most powerful.” Richard Thaler responds.

George Loewenstein and Peter Ubel’s Economics Behaving Badly: “[B]ehavioral economics is being used as a political expedient, allowing policymakers to avoid painful but more effective solutions rooted in traditional economics.”

Thanks for putting the list together Jason. I read Misbehaving recently and as a non-expert in the field found it provided a great overview as well as some history. Keen to explore some more material now with your suggestions.